Net ‘hot money’ inflow at $427M in August

More of the so-called “hot money” entered the country than left in August such that the net inflow of $427.1 million reversed the net outflow posted a year ago, Bangko Sentral ng Pilipinas (BSP) data released Thursday showed.

However, the net inflow of foreign portfolio investments last month was lower than the $1.1 billion in July and $450.9 million in June.

A net outflow of $542.5 million was recorded in August last year.

Last month, registered foreign portfolio investments reached $1.8 billion, up 57.4 percent from $1.1 billion a year ago but below the $2.3 billion registered in July.

The BSP explained that the 22.6-percent month-on-month decline in inflow was “due to hesitancy to invest during the ‘ghost month’” of August.

More than four-fifths of the investments registered that month were in Philippine Stock Exchange-listed securities, mostly those of banks, food, beverage and tobacco firms, holding companies, property firms and telecommunication companies, the BSP said.

“Transactions in PSE-listed securities and peso government securities yielded net inflows of $248 million and $186 million, respectively, while investments in other peso debt instruments resulted in net outflow of $7 million,” it added.

On the other hand, outflow increased by a tenth to $1.3 billion in August from July’s $1.2 billion on the back of “profit-taking, disappointing first-half corporate earnings reports and investor reaction to the possible interest rate hike in the United States, which may take effect as early as September,” the BSP said.

Outflows in August also dropped by almost a fifth from $1.7 billion a year ago.

The top five investor-countries whose combined share accounted for almost four-fifths of the total last month were Belgium, Luxembourg, Singapore, United Kingdom and the US, which was also the destination of the bulk or 84.2 percent of outflow.